A Study On The Relationship Between The Introduction Of Professional Managers In China 's IT Listed Companies And The Performance Of Enterprises

It is undeniable that one of the most important factors of successful IT companies is its entrepreneur. China’s market environment requires companies to improve their competitiveness to keep running. However, many companies are very easy to lose competitiveness because of the limitations of management ability from founder-CEOs. Companies should also consider succession problems in the future. One of the ways to solve these problems is to hire professional manager, which is also called CEO.This paper is doing research on the performance of newly hired CEOs in Chinese IT companies. The reasons are as follows. First of all, Chinese IT companies have a bright future due to the information technology revolution. Secondly, IT companies need strong CEOs to led forward. Thirdly, CEO hiring needs to be consistent with corporate strategy.One of the conclusions of the principal-agent theory is that CEOs of IT companies can be effectively selected through corporate governance mechanisms. The key to find a scientific method to measure the effectiveness of hiring professional managers(or CEOs) is very important for IT companies. On the basis of former studies, this article uses empirical research method to study the performance of Chinese listed IT companies on hiring CEOs through focusing on the growth and volatility of profitability. The conclusions are:(1) for newly hired CEOs, the growth of profitability is lower than founder-CEOs;(2) for newly hired CEOs, the horizontal volatility of profitability is stronger than founder-CEOs;(3) for newly hired CEOs, the vertical volatility of profitability is stronger than founder-CEOs;(4) for newly hired CEOs, earnings performance are not related to the nature of equity.